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Oct 31, 2024
- KoFIU Unveils H1 2024 Survey Result on Virtual Asset Service Providers
- The Korea Financial Intelligence Unit (KoFIU) conducted a survey on 21 registered virtual asset service providers (VASPs) to assess the current state of the domestic virtual asset market and keep relevant statistics up to date. Survey Overview (Respondents) 21 VASPs(14 exchange service providers and 7 wallet and custodian service providers) (Survey Method) Data collected from VASPs (Period Covered) January 1, 2024 to June 30, 2024 Key Survey Findings for H1 2024 The domestic market for virtual assets in H1 2024 continues to show an upward trend from H2 2023 with average daily trading volume (up 67%), market capitalization (up 27%), total amount of deposits (up 3%), and number of users eligible to trade (up 21%) all increasing from previous six months. Total operating profits (up 106%) of VASPs also went up significantly. When compared with the survey results of H2 2023, the number of virtual assets listed on exchanges declined due to increased number of coin-only exchange service providers closing down their business operations. The number of new listings by the KRW-based exchange service providers remained the same as previous six months (155), while the number of delistings went up slightly (up 7%). The number of exclusively listed virtual assetsthose tradable via single VASP in the domestic marketdropped considerably (down 14%). Maximum drawdown (price volatility) of virtual assets increased 8 percentage points from the previous six-month period to 70 percent. External transfer of virtual assets by exchange service providers also increased considerably (up KRW36.7 trillion, or 96%). Among them, those transferred to registered entities under the travel rule declined slightly (down 2%p), while those transferred to whitelisted overseas entities and digital wallets rose somewhat (up 1%p). The number of employees hired by VASPs rose 6 percent for KRW-based exchange service providers but fell 51 percent for coin-only exchange service providers due to a higher rate of b
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Oct 11, 2024
- Household Loans, September 2024
- In September 2024, the outstanding balance of household loans across all financial sectors rose KRW5.2 trillion (preliminary), growing at a slower pace compared with the previous month (up KRW9.7 trillion). * Change (in trillion KRW, m-o-m): +4.1 (Apr 2024), +5.3 (May), +4.2 (Jun), +5.2 (Jul), +9.7 (Aug), +5.2 (Sep)p (By Type) Home-backed mortgage loans rose KRW6.9 trillion, increasing at a slower pace compared with the previous month (up KRW8.5 trillion). Mortgage loans in the banking sector also rose at a slower pace from a month ago (up KRW8.2 trillion up KRW6.2 trillion). Other types of loans declined in both the banking (up KRW1.1 trillion down KRW0.5 trillion) and nonbanking (up KRW0.1 trillion down KRW1.2 trillion) sectors. (By Sector) The pace of household loan growth decelerated in both the banking and nonbanking sectors compared with the previous month. In September, banks saw an increase of KRW5.7 trillion in household loans, a slowdown from KRW9.2 trillion a month ago. This is mainly attributable to a slower pace of mortgage loan growth in the banking sector (up KRW8.2 trillion up KRW6.2 trillion), backed by the effects of implementing the second phase stressed debt service ratio (DSR) rule from September and the banking sectors self-driven moves to strengthen household loan management. Other types of loans, such as credit loans, in the banking sector edged down KRW0.5 trillion from the rise of KRW1.1 trillion a month ago. In the nonbanking sector, mortgage loans went up at a faster pace (up KRW0.3 trillion up KRW0.7 trillion) compared with the previous month, but other types of loans fell KRW1.2 trillion from the increase of KRW0.1 trillion a month ago due mainly to the effects of bad debt write-offs at the end of the quarter. Mutual finance businesses (down KRW0.4 trillion), specialized credit finance businesses (down KRW0.4 trillion), and savings banks (down KRW0.2 trillion) saw drops in household loans, while insurance companies (up KRW0.4 trillion)
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Sep 26, 2024
- Korea-Vietnam Financial Cooperation Forum Highlights Sustainable Finance and Capital Market Development
- Standing Commissioner Lee Hyung Ju of the Financial Services Commission traveled to Hanoi, Vietnam from September 25 to 26 to attend the Korea-Vietnam Financial Cooperation Forum, meet with senior officials from the State Bank of Vietnam and the State Securities Commission, and have a meeting with officials from local branches of Korean financial companies operating in Vietnam. Vietnam is Koreas third largest trade partner and it hosts the second largest number of Korean financial companies following the U.S. FSC Standing Commissioners visit this time was aimed at promoting domestic financial companies and policy financial institutions business expansion in Vietnam. Korea-Vietnam Financial Cooperation Forum On September 25, FSC Standing Commissioner Lee Hyung Ju attended the Korea-Vietnam Financial Cooperation Forum held in Hanoi under the theme of sustainable finance and capital market development. The forum was jointly sponsored by the FSC and Vietnams State Bank of Vietnam and State Securities Commission. The forum was organized into two parts(a) Towards a Sustainable Future: Enhancing Korea-Vietnam Financial Synergies and (b) Capital Market Development and Transition Finance. In the opening of the first part, Standing Commissioner Lee delivered congratulatory remarks where he introduced various climate finance strategies being pursued by the Korean government, such as the guidelines on K-taxonomy, green bonds and green finance, and ESG disclosure standards. Speaking on the mutually beneficial relationship that has been maintained between Korea and Vietnam since the establishment of diplomatic ties in 1992, Standing Commissioner Lee said that he expects this forum to help build a more future-oriented financial partnership between the two countries. In the second part, Standing Commissioner Lee delivered opening remarks where he introduced Koreas recent capital market reform initiatives and key elements of Corporate Value-up Program. To make sure that growth momen
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Sep 11, 2024
- Household Loans, August 2024
- In August 2024, the outstanding balance of household loans across all financial sectors rose KRW9.8 trillion (preliminary), growing at a steep pace compared with the previous month (up KRW5.2 trillion). * Change (in trillion KRW, m-o-m): -4.9 (Mar 2024), +4.1 (Apr), +5.3 (May), +4.2 (Jun), +5.2 (Jul), +9.8 (Aug)p (By Type) Home-backed mortgage loans rose KRW8.5 trillion, expanding at a significantly faster pace compared with the previous month (up KRW5.4 trillion). Other types of loans increased KRW1.3 trillion, with banks (down KRW0.1 trillion up KRW1.1 trillion) and nonbanks (down KRW0.1 trillion up KRW0.2 trillion) both experiencing a shift back up from the drops seen a month ago. (By Sector) Household loans grew at a much faster pace in the banking sector and turned back up from the previously declining trend in the nonbanking sector. In August, banks saw an increase of KRW9.3 trillion, a steep rise from the previous month (up KRW5.4 trillion). This was mainly attributable to an expansion of mortgage loans (up KRW5.6 trillion up KRW8.2 trillion) led by strong housing market activities in the Seoul metropolitan area. Other types of loans turned back up from a drop in the previous month (down KRW0.1 trillion up KRW1.1 trillion) mainly led by a rise in credit loans. In the nonbanking sector, household loans edged up from the decline seen a month ago as mortgage loans (down KRW0.1 trillion up KRW0.3 trillion) and other types of loans (down KRW0.1 trillion up KRW0.2 trillion) all increased. Specialized credit finance businesses (up KRW0.7 trillion) and savings banks (up KRW0.4 trillion) continued to see growth, while mutual finance businesses maintained the declining trend (down KRW1.0 trillion). Insurance companies saw a rise of KRW0.3 trillion from the decline seen a month ago. (Assessment) Household loans rose steeply in August compared with the previous month due to strong housing market transactions in the Seoul metropolitan area, large demand from borrowers pri
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Sep 04, 2024
- FSC Chairman Visits Japan to Strengthen Financial Cooperation and Promote Corporate Value-up Program
- Chairman Kim Byoung Hwan of the Financial Services Commission (FSC) traveled to Tokyo, Japan on his first overseas business trip since taking office in July 2024. On September 3, Chairman Kim had a meeting with the Commissioner of Japans Financial Services Agency (FSA), visited Japanese companies that have disclosed their value-up plans in Japan, and held talks with officials from Korean financial companies operating in Japan. Meeting with FSA Commissioner Since the financial authorities of Korea and Japan resumed their shuttle meeting for the first time in seven years in December last year at the 7th bilateral meeting held in Seoul, new leadership has been appointed at both organizations in July this year. Commissioner Ito Hideki of Japans Financial Services Agency (FSA) took office on July 5, and Chairman Kim Byoung Hwan of Koreas Financial Services Commission took office on July 31. On September 3, the new leaders of Korea and Japans financial authorities held a meeting at Japans FSA to exchange opinions on recent financial market developments and related issues and discuss ways to strengthen mutual cooperation. First, both leaders shared a common view on the need to strengthen bilateral cooperation to more effectively cope with volatility in global financial markets. Since monetary policies and economic situations in major economies, such as the U.S., E.U., and Japan, are reaching an inflection point, and as there are multiple variables that can have a significant impact on the global economy, such as the U.S presidential elections, both leaders agreed that there may be growing volatility in global financial markets in the future. As it was evident in the global stock market rout experienced in early August caused by fears of a recession in the U.S., both leaders assessed that financial market anxiety can erupt anytime if market participants overreact and if there is too much herd behavior. In order to respond to market volatility in a timely manner, both leader
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Aug 20, 2024
- FSC Chairman Meets with Banking Sector and Holds Talks on Financial Stability and Sustainable Growth
- Chairman Kim Byoung Hwan of the Financial Services Commission met with the heads of 19 banks and held talks on the importance of managing risks to ensure financial stability and seeking innovative ways to promote sustainable growth on August 20. Starting with todays meeting with the banking sector, Chairman Kim will meet with each financial sector to have discussions and exchange views on the four major risks facing the Korean economy, such as household debt, small business debt, real estate project finance debt, and the soundness of the nonbanking sector. In his opening remarks, Chairman Kim talked about the need to (a) preemptively manage the pace of household debt growth through concerted efforts of the banking sector and the government, (b) more systematically manage lending to small businesses based on their repayment capabilities, (c) pursue regulatory reforms to bring about change and promote innovation in banks operating practices, which have traditionally relied on interest rate spreads and domestic operations, and (d) continue to work on strengthening internal control mechanisms through the introduction of a responsibilities mapping system from January next year. In particular, with regard to the measures to control the pace of household debt growth, Chairman Kim stressed the need for banks to establish their own household debt management systems in a self-regulating manner based on the repayment capability (debt service ratio) of borrowers. To this end, Chairman Kim said that the following measures will be put into practice from September 1 for implementing the second phase stressed DSR rules. First, beginning on September 1, the second phase stressed DSR rules will take effect as announced previously, but mortgage loans for houses in the Seoul metropolitan area will be subject to an increased stress rate of 1.2%p, instead of 0.75%p. Second, from September, banks will be required to calculate DSR on all household loans for the purpose of internal manageme
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Aug 12, 2024
- Household Loans, July 2024
- In July 2024, the outstanding balance of household loans across all financial sectors rose KRW5.3 trillion (preliminary), growing at a faster rate compared with the previous month (up KRW4.2 trillion). * Change (in trillion KRW, m-o-m): -1.9 (Feb 2024), -4.9 (Mar), +4.1 (Apr), +5.3 (May), +4.2 (Jun), +5.3 (Jul)p (By Type) Home-backed mortgage loans rose KRW5.4 trillion, growing at a slower rate compared with the previous month (up KRW6.0 trillion), as banks saw a smaller increase in mortgage loans (up KRW6.2 trillion up KRW5.6 trillion). Other types of loans fell KRW0.2 trillion with declines seen in both the banking (down KRW0.3 trillion down KRW0.1 trillion) and nonbanking (down KRW1.5 trillion down KRW0.1 trillion) sectors. However, the pace of the decline decelerated compared with the previous month (down KRW1.8 trillion). (By Sector) Household loans expanded at a slower rate in the banking sector and declined at a slower rate in the nonbanking sector. In July, banks saw an increase of KRW5.5 trillion in household loans, a drop from KRW5.9 trillion in the previous month. The decline was led by the slowdown in mortgage loans (up KRW6.2 trillion up KRW5.6 trillion) as group lending for new apartment subscription fell KRW2.0 trillion from a rise of KRW0.1 trillion a month ago. Other types of loans declined at a slower rate compared with the previous month (down KRW0.3 trillion down KRW0.1 trillion). In the nonbanking sector, household loans declined at a significantly slower rate compared with a month ago (down KRW1.7 trillion down KRW0.2 trillion), due mainly to a base effect from the previous month. Mutual finance businesses (down KRW1.2 trillion) and insurance companies (down KRW0.02 trillion) continued to see declines, while specialized credit finance companies (up KRW0.8 trillion) and savings banks (up KRW0.2 trillion) saw increases. (Assessment) Household loans have been on an upward trajectory since April this year led by policy loans and mortgage loans from
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Aug 12, 2024
- FSC Chairman Holds Meeting with Listed Companies to Boost Corporate Value-up Efforts
- Chairman Kim Byoung Hwan of the Financial Services Commission held a meeting with a group of listed companies and related organizations to boost their efforts to participate in the Corporate Value-up Program on August 12. Together with related organizations, Chairman Kim said that the FSC will provide active support to promote companies self-driven efforts to participate in the Corporate Value-up Program. Todays meeting was joined by three companies (Kiwoom Securities Co., Meritz Financial Group Inc., and HK inno.N Corp.) that have already filed a voluntary disclosure or issued a prior notice of disclosure for their value-up plans and five other listed companies. Key officials from the Korea Exchange, Korea Listed Companies Association, KOSDAQ Listed Companies Association, Korea Financial Investment Association, and the value-up programs advisory group also attended the meeting. The following is a summary of FSC Chairman Kims remarks at the meeting. Regarding last weeks stock market volatility, the financial authorities are well aware of the concern about the relatively large fall experienced by our stock market and the slow pace of its recovery. In order to make our stock market more robust and resilient, it is important to boost participation in the Corporate Value-up Program, so that we can enhance the competitiveness of listed firms and the stock market. Moreover, making improvements to our capital market through the Corporate Value-up Program is also important from the perspective of seeking to transform our economic structure from the current debt-reliant model to an equity-centered approach. Making improvements to the current debt-dependent structure of our economy will help to make our economy more dynamic, enhance stability, and contribute to sustainable growth. Since introducing the outline of support measures for the Corporate Value-up Program in February this year, the government has worked to swiftly implement follow-up measures. The authorities will co
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Jul 22, 2024
- Vice Chairman Visits London to Promote Capital Market Reform Programs and Strengthen Bilateral Cooperation
- Vice Chairman Kim Soyoung of the Financial Services Commission visited London, the United Kingdom (UK) from July 16 to 19 in an effort to promote Koreas capital market reform and corporate value-up programs to global investors and to strengthen financial cooperation between Korea and the UK. IR with Global Investors On July 17, Vice Chairman Kim held an investor relations event for global investors and provided key information about the progress of Koreas capital market reform initiatives aimed at boosting market accessibility, guaranteeing fairness and transparency in market transactions, and enhancing shareholder values. In this regard, Vice Chairman Kim provided detailed information about the opening up of the foreign exchange (FX) market, plans to introduce an alternative trading system (ATS), short sale reform measures, and the corporate value-up program. UK-Korea Financial Forum On July 17, Vice Chairman Kim also attended the UK-Korea Financial Forum and delivered a congratulatory speech. In his remarks, Vice Chairman Kim talked about the importance of maintaining strong cooperation with the UK to effectively respond to various challenges and opportunities presented by shifting global market environment, such as technological advance and climate change. Meeting with Lord Mayor of the City of London On July 18, Vice Chairman Kim held a meeting with Lord Mayor Michael Mainelli of the City of London and exchanged views on key issues surrounding major elections around the world this year and policies to promote global financial hubs in both countries. At the meeting, Vice Chairman Kim took time to explain Koreas key financial policies, such as open banking, establishing a loan transfer infrastructure to facilitate refinancing of personal loans at lower interest rates, introducing financial MyData service, adopting guidelines on ESG disclosure, and so on. Meeting with FTSE Russell Following the meeting with the Lord Mayor of the City of London, Vice Chairman Kim vi
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Jul 10, 2024
- Household Loans, June 2024
- In June 2024, the outstanding balance of household loans across all financial sectors rose KRW4.4 trillion (preliminary), growing at a slower rate compared with the previous month (up KRW5.3 trillion). In the first half of 2024, household loans rose KRW7.9 trillion (up 0.5 percent), showing a stable trend of growth compared with the end of 2023. * Change (in trillion KRW, m-o-m): +0.9 (Jan 2024), -1.9 (Feb), -4.9 (Mar), +4.1 (Apr), +5.3 (May), +4.4 (Jun)p (By Type) Home-backed mortgage loans rose KRW6.1 trillion, growing at a slightly faster rate compared with the previous month (up KRW5.6 trillion), as the banking sector continued to see expansion of mortgage loans (up KRW5.7 trillion up KRW6.3 trillion). Other types of loans declined KRW1.7 trillion as the banking sector saw a drop of KRW0.3 trillion from the growth of KRW0.3 trillion a month ago and the nonbanking sector saw an expanded level of drop from a month ago (down KRW0.5 trillion down KRW1.4 trillion). (By Sector) Household loans grew at a similar level in the banking sector but fell at a faster rate in the nonbanking sector. In June, banks saw a rise of KRW.6.0 trillion in household loans, which showed a similar level of pace from the previous month (up KRW6.0 trillion), as mortgage loans went up at a faster rate (up KRW5.7 trillion up KRW6.3 trillion) with increased demand for policy mortgage loans and recovery in housing transactions. Other types of loans turned lower slightly compared with the previous month (up KRW0.3 trillion down KRW0.3 trillion). In the nonbanking sector, household loans fell at a faster rate (down KRW0.7 trillion down KRW1.6 trillion) due to the quarterly write-off of nonperforming loans. Mutual finance businesses (down KRW1.0 trillion), specialized credit finance companies (down KRW0.3 trillion), and savings banks (down KRW0.3 trillion) saw declines, while insurance companies saw a slight rise (up KRW0.02 trillion). (Assessment) The financial authorities assessed that the growt
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Jul 08, 2024
- FSC Vice Chairman Speaks about Megatrends and Policy Framework at Future Finance Seminar
- Vice Chairman Kim Soyoung of the Financial Services Commission attended a policy seminar on future finance hosted by Korea Institute of Finance and sponsored by the FSC on July 8. Todays seminar was held under the theme of future megatrends and impending changes in the financial sector, which brought together public and private sector experts with diverse backgrounds, to have discussions on the impact of rapidly changing demographic structure, climate change, and technological advance on the financial market and ways to effectively cope with these changes. At the beginning of the seminar, Vice Chairman Kim delivered a keynote address on the topic of megatrends and policy framework for future finance, in which he emphasized the need for the financial industry and the government to prepare measures to secure sustainable ways to grow in a preemptive manner. The following is a summary of Vice Chairman Kims remarks. Against the backdrop of rapidly changing financial environments and market conditions, the authorities have been thus far mostly focused on responding to issues that needed to be addressed urgently. However, since financial policy can have a significant impact on the structural and macro-level changes, it is important that the authorities set their sight on a medium- to long-term horizon when formulating policy responses. In this regard, the authorities are working on policy frameworks for future finance, based on systematic analyses intended to minimize risks and seek opportunities for growth over a medium- to long-run. The taskforce on future finance organized into three sub-groupsdemographic shift, climate change, and technological advancehave been examining both challenges and opportunities in their respective areas, while seeking policy measures with three specific aimsmitigation, adaptation, and innovation. The mitigation policy is aimed at reducing the impact of impending change and shock, while slowing the pace of their occurrence. The adaptation poli
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Jul 03, 2024
- SFC Imposes Penalty Surcharges on Global Investment Banks for Violating Short Sale Regulations
- The Securities and Futures Commission, a sub-commission within the Financial Services Commission responsible for overseeing the securities and futures markets, held the thirteenth regular meeting on July 3 and decided to impose penalty surcharges amounting to KRW27.173 billion in total on two former Credit Suisse affiliated investment banks for violating short sale regulations under the Financial Investment Services and Capital Markets Act (FSCMA). The level of penalty surcharge imposed on each of the two former Credit Suisse affiliated entities is the largest (KRW16.94 billion on Credit Suisse AG) and the third largest (KRW10.23 billion on Credit Suisse Singapore Ltd.) ever since the penalty surcharge system began to be implemented on naked short sale activities in April 2021. In the case of Credit Suisse AG (currently UBS AG), from April 7, 2021 to June 9, 2022, the investment bank was found to have engaged in naked short sales in the amount of about KRW60.33 billion (162,365 shares on 20 stock items) without possessing these stocks at the time of placing short sale orders. In the case of Credit Suisse Singapore Ltd., from November 29, 2021 to June 9, 2022, the investment bank was found to have engaged in naked short sales in the amount of about KRW35.28 billion (401,195 shares on five stock items) without possessing these stocks at the time of placing short sale orders. In addition, prior to todays meeting, the SFC decided to impose administrative fines worth KRW284.2 million in total on four domestic financial investment businesses, two foreign financial investment businesses, and an individual investor for violating their net short position balance reporting and disclosure duties under the FSCMA. The financial authorities will continue to strictly deal with naked short selling and other unfair trading activities in capital market to promote soundness in market transactions. * Please refer to the attached PDF for details.
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Jun 17, 2024
- Financial Cooperation with Africa to be Strengthened
- The Financial Services Commission and the Korea Federation of Banks will invite and host the banking industry associations of three African countries (Nigeria, Botswana, and Mauritius) and the Southern African Development Community from June 17 to 19 to seek stronger financial cooperation between Korea and Africa. Equipped with young and dynamic populations and abundant natural resources, African economies have been developing rapidly, which has also gained increasing attention from domestic financial sectors. Against this backdrop, the invitation programs have been prepared to promote cooperation in the field of finance, building upon the momentum established at the Korea-Africa Summit held earlier this month. On June 17, the Korea Federation of Banks signed memoranda of understanding (MOUs) with the banking associations of Nigeria, Botswana, and Mauritius to seek stronger cooperation and mutual development of the banking industries. Under the MOUs signed today, the Korean banking sector will offer know-hows and experience in the areas of digital finance, mobile payments, and credit data, and the signatories will hold joint training and engage in other collaboration projects. FSC Chairman Kim Joo-hyun attended the MOU signing event and delivered congratulatory remarks where he emphasized the importance of todays agreement as a beginning for seeking stronger cooperation between Korea and Africa. In this regard, Chairman Kim said that he hopes to see Koreas strong advantage and know-hows in the field of digital finance being able to make great contributions to Africas economic development going forward. Chairman Kim added that Koreas financial industry will also benefit and grow from this process. Apart from todays MOU signing event, the three-day programs for Korea-Africa Economic and Financial Cooperation also include a joint seminar held by the banking associations (Jun. 17), a tour of major financial institutions (Jun. 18), and other cultural events. * Please ref
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Jun 12, 2024
- Household Loans, May 2024
- In May 2024, the outstanding balance of household loans across all financial sectors rose KRW5.4 trillion (preliminary), growing at a faster rate compared with the previous month (up KRW4.1 trillion). * Change (in trillion KRW, m-o-m): +0.1 (Dec 2023), +0.9 (Jan 2024), -1.9 (Feb), -4.9 (Mar), +4.1 (Apr), +5.4 (May)p (By Type) Home-backed mortgage loans rose KRW5.6 trillion, growing at a faster rate compared with the previous month (up KRW4.1 trillion), as the banking sector saw a significant growth in mortgage loans (up KRW4.5 trillion up KRW5.7 trillion). Other types of loans declined KRW0.2 trillion as the banking sector saw the slowing pace of growth (up KRW0.6 trillion up KRW0.3 trillion) and the decline continued in the nonbanking sector (down KRW0.5 trillion down KRW0.6 trillion). (By Sector) Household loans edged up at a faster rate in the banking sector, while the pace of the decline slowed in the nonbanking sector. In May, banks saw a rise of KRW6.0 trillion in household loans, which went up from the growth of KRW5.1 trillion a month ago. The rising trend in the banking sector can be explained largely by the growth in mortgage loans (up KRW4.5 trillion up KRW5.7 trillion) led by housing market recovery and by recent changes made in household loan statistics, which began to take into account certain types of housing loans that were excluded previously. Other types of loans also continued to grow due to seasonal factors, but the pace of growth slowed compared with the previous month (up KRW0.6 trillion up KRW0.3 trillion). In the nonbanking sector, household loans dropped KRW0.7 trillion. Mutual finance businesses continued to see a decline (down KRW1.6 trillion), while specialized credit finance companies (up KRW0.7 trillion), savings banks (up KRW0.1 trillion), and insurance companies (up KRW0.1 trillion) all saw household loans edging up. (Assessment) In May 2024, the growth in household loans was caused largely by the increase in mortgage loans in the ban
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May 27, 2024
- FSC Announces Measures to Support Covered Bond Market to Facilitate Supply of Long-term, Fixed Rate Mortgages
- The Financial Services Commission announced that an agreement signing event was held between Korea Housing Finance Corporation (HF) and five major commercial banks to facilitate payment guarantees on covered bonds on May 27. In accordance with this agreement, HF will begin to provide payment guarantee service on covered bonds issued by banks starting from May 27. This is part of the broader set of government plans intended to support the covered bond market with aims to increase the supply of long-term, fixed interest rate mortgage products by commercial banks. Through HFs payment guarantee service, commercial banks are able to issue covered bonds at lower interest rates and investors are able to invest in safe, long-term assets, which require relatively little capital costs. For instance, with HFs payment guarantee service, covered bonds issued by banks with an AAA rating will have 5 to 21 basis points lower interest rates for issuance, when compared to typical bank bonds with same maturities. Therefore, if banks are incentivized in this way to reduce funding costs, this will encourage them to provide more long-term, fixed interest rate mortgage products at lower interest rates. HF also plans to seek re-securitization of covered bonds. Under this program, HF will purchase 10-yr covered bonds issued by banks, for instance, and through a settlor-trustee trust, issue asset-backed securities and sell them. This program will facilitate the issuance and purchase of long-term covered bonds in the market, and the supply of long-term funds raised this way can be put to use in providing long-term, fixed interest rate mortgages for houses valued more than KRW600 million, which is currently unavailable under the policy mortgage loan program. In line with the introduction of HFs payment guarantee service, there will be other types of incentives for banks and financial institutions. First, when issuing covered bonds with 10-yr or longer maturities, banks will be allowed to use (
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May 16, 2024
- FSC Approves DGB Daegu Bank's Transition from Regional Bank to Nationwide Operator
- The Financial Services Commission decided to approve DGB Daegu Banks application to make a transition from a region-specific operator to a nationwide commercial bank at the 9th regular meeting held on May 16. The FSCs approval will introduce a new nationwide commercial bank for the first time in 32 years since 1992, bringing the total number of nationwide banks to seven. On July 5, 2023, the government announced plans to allow regional banks transition to become nationwide banking business operators as part of its broader policy to promote fair and effective competition in the banking sector. As a follow-up measure, on January 31, 2024, the FSC and the FSS introduced specific method and procedures for authorizing a regional banks transition to operate as a nationwide bank. Following this, on February 7, 2024, DGB Daegu Bank applied for the modification of conditions specified under the Article 8 of the Banking Act. Upon receiving the application, the FSC and the FSS then went through a careful review process by having an external review committee and reached a decision that DGB Daegu Bank meets all the regulatory requirements necessary to be authorized to operate as a nationwide commercial bank. With DGB Daegu Bank making a transition to operate as a nationwide operator, the authorities expect that there will be enhanced competition between banks with increased benefits and convenience afforded to consumers. DGB Daegu Bank plans to open 14 new branches in the Seoul metropolitan area and across regions spanning from Chungcheong-do and Gangwon-do, which will help to boost the level of access to financial services for consumers residing in these regions. In addition, DGB Daegu Bank plans to improve customers access to financial services through advancement of its own service application and expanded partnership with third-party platforms, so as to help reduce costs and offer low interest rate products to consumers. DGB Daegu Bank will also expand credit supply to the s
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May 16, 2024
- KoFIU Unveils H2 2023 Survey Results on Virtual Asset Service Providers
- The Korea Financial Intelligence Unit (KoFIU) conducted a survey on the twenty-nine registered virtual asset service providers (VASPs) to see the current state of the domestic virtual asset market and keep relevant statistics up to date. Survey Overview (Respondents) 29 VASPs(22 exchange service providers and 7 wallet and custodian service providers) (Survey Method) Data collected from VASPs (Period Covered) July 1, 2023 to December 31, 2023 Key Survey Findings for H2 2023 The domestic market for virtual assets in H2 2023 saw increases in terms of average daily trading volume (up 24%), market capitalization (up 53%), total operating profits (up 18%), and total volume of deposits in KRW (up 21%), as virtual asset prices increased and investment sentiment recovered. The total number of users eligible to trade (up 6%) also turned back up from the decline seen in the first half of 2023. When compared with the survey results of H1 2023, in the latter half of the year, the KRW-based exchange service providers saw a notable increase in new listings (up 70%), while the coin-only exchange service providers experienced a significant number of delistings (down 82%), which brought down the total number of virtual asset types available for trade (down 3.5%). Especially, the number of exclusively listed virtual assetsthose tradable via single VASP in domestic marketdropped considerably (down 9.3%). Maximum drawdown, or price volatility, still remained high at 61.5 percent (62.4% in H1 2023). External transfers of virtual assets by exchange service providers also increased considerably (up KRW8.4 trillion, or 28%). Among them, those transferred to the registered entities under the travel rule rose rapidly (up KRW3.8 trillion, or 57%). As of the end of December 2023, there were two coin-only exchange service providers and two wallet and custodian service providers that announced plans to terminate their business operations. As there are growing numbers of VASPs closing down their b
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May 13, 2024
- Household Loans, April 2024
- In April 2024, the outstanding balance of household loans across all financial sectors rose KRW4.1 trillion (preliminary) from the previous month. When compared with the end of 2023, the household loan balance dropped KRW1.8 trillion, which shows that the growth trend remains on a stable course. * Change (in trillion KRW, m-o-m): +2.6 (Nov 2023), +0.1 (Dec), +0.9 (Jan 2024), -1.9 (Feb), -4.9 (Mar), +4.1 (Apr)p (By Type) Home-backed mortgage loans increased KRW4.1 trillion as the banking sector saw a significant growth in mortgage loans (up KRW0.5 trillion up KRW4.5 trillion). Other types of loans went up KRW0.03 trillion from a month ago (down KRW5.0 trillion) as the banking sector saw an increase of KRW0.6 trillion, while the nonbanking sector saw a slower pace of decline (down KRW2.8 trillion down KRW0.6 trillion). (By Sector) Household loans edged back up in the banking sector while declining at a slower pace in the nonbanking sector. Banks saw a rise of KRW5.1 trillion in household loans compared with the previous month as relevant statistics on household loan data began to incorporate certain types of housing loans previously excluded from household loan statistics but classified instead as policy funds. Banks issuance of new mortgage loans also expanded from a month ago (up KRW2.0 trillion up KRW3.6 trillion). A series of initial public offerings scheduled in April-May also pushed up the volume of credit loans temporarily. In the nonbanking sector, household loans fell KRW1.0 trillion. Although the pace of the decline slowed compared with the previous month (down KRW3.3 trillion), the overall trend since the second half of 2022 has steadily shown a slowing trend. Mutual finance businesses continued to see a decline (down KRW2.1 trillion) in household loans, while specialized credit finance companies (up KRW0.6 trillion), savings banks (up KRW0.5 trillion), and insurance companies (up KRW0.01 trillion) all saw growth led by increase in credit loans. (Assessment
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Apr 22, 2024
- Taskforce on ESG Finance Holds Meeting and Discusses Key Details of ESG Disclosure Standards
- The Financial Services Commission held the 4th taskforce meeting on ESG (environmental, social and governance) finance with related ministries, industry groups, investors, and experts on April 22 to have discussions on details of an open draft on domestic ESG disclosure standards. FSC Vice Chairman Kim Soyoung presided over the meeting and outlined basic principles and key details of the draft standards. A Summary of Vice Chairmans Remarks First, this open draft on domestic ESG disclosure standards is consistent with global standards as it amply takes into account cases from overseas. In this regard, the draft standards have been formulated to ensure interoperability with the ESG disclosure standards of other major countries to minimize the burden of redundant disclosure duties for domestic businesses. In addition, the draft standards will mandate climate-related disclosures first, while keeping the disclosure of information on other non-climate-related ESG elements on a voluntary basis. Second, the draft standards have been prepared to provide quality information to investors. Instead of simply requiring businesses to list up relevant data on climate risks and opportunities, the draft standards will actually promote behavioral change from businesses through a more systematic provision of information disclosures based on important categories, such as governance structure, strategy, risk management process, and so on. Third, the draft standards also take into account the needs of enterprises and ensure that there is no excessive burden placed on them. Considering domestic firms capabilities and level of preparedness, authorities will provide detailed guidelines and allow companies to disclose qualitative informationinstead of quantitative datafor certain types of indicators prone to a large degree of subjectivity in their measurement. This open draft on ESG disclosure standards also takes into consideration the need for our economy to address some of the newly emergi
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Apr 11, 2024
- Household Loans, March 2024
- In March 2024, the outstanding balance of household loans across all financial sectors fell KRW4.9 trillion (preliminary), declining at a faster pace compared to the previous month (down KRW1.9 trillion). * Change (in trillion KRW, y-o-y): +6.2 (Oct 2023), +2.6 (Nov), +0.1 (Dec), +0.9 (Jan 2024), -1.9 (Feb), -4.9 (Mar)p (By Type) Home mortgage loans increased KRW0.05 trillion, growing at a much slower pace compared to the previous month (up KRW3.7 trillion), due to a substantial drop in the banking sector (up KRW4.7 trillion up KRW0.5 trillion). Other types of loans declined KRW4.9 trillion, with drops seen in both the banking (down KRW2.8 trillion down KRW2.1 trillion) and nonbanking (down KRW2.7 trillion down KRW2.8 trillion) sectors. (By Sector) Household loans turned lower in the banking sector, while the pace of decline moderated in the nonbanking sector. In March, banks saw a decline of KRW1.6 trillion in household loans, which shifted down from the growth of KRW1.9 trillion a month ago, with the implementation of the stressed debt service ratio (DSR) rules. Other types of loans from banks also continued to decline (down KRW2.8 trillion down KRW2.1 trillion), led by credit loans. In the nonbanking sector, household loans fell KRW3.3 trillion. Mutual finance businesses (down KRW2.4 trillion) and insurance companies (down KRW0.2 trillion) saw slower paces of decline from a month ago, while specialized credit finance companies (down KRW0.4 trillion) and savings banks (down KRW0.3 trillion) saw faster paces of decline. (Assessment) The continued decline in household loans appears to be caused by the prolonged high interest rates and delayed recovery in housing market transactions. The financial authorities will continue to closely monitor situations regarding the housing market and interest rates to make sure that household debt growth is stably managed with a long-term perspective. * Please refer to the attached PDF for details.
